Interview with Christian WOLF, Partner – CLARITIS.
Published Dec 17, 2021 on sphere.swiss
By Elsa Floret
For Christian Wolf, independent asset managers are not yet equipped to handle the regulatory environment in which they will soon be operating. The biggest risk for them is not meeting the conditions required for authorization within the allotted time.
Lisa Desjardins and you have just launched your own company specializing in risk management and financial compliance. Who are your main customers?
Christian Wolf : We work mainly with small and medium-sized financial intermediaries in Switzerland and Luxembourg. These are mainly asset managers and trustees, as well as fund managers. We support them with their FINMA registration, while providing outsourcing services for their risk management and compliance functions. We also carry out one-off advisory and support mandates for smaller banks, even if these have their own risk management and compliance functions.
We are also advising a growing number of innovative financial companies, thanks to a recent FINMA authorization with streamlined requirements, known as a “fintech authorization”. The latter gives the right to accept deposits from the public up to a maximum of 100 million Swiss francs or cryptographic assets. However, these deposits or assets cannot be invested or remunerated. Until recently, if a financial services provider wanted to accept deposits from the public, it had to obtain authorization as a bank or securities house.
What are the greatest risks facing asset managers?
Unlike collective asset managers, for whom prudential audits are routine, independent asset managers are not yet equipped to deal with the regulatory environment in which they will soon be operating. There’s a real strategic dimension to the choices each manager has to make about how to meet his regulatory obligations. It is essential to seek advice from specialists, or simply from your supervisory body. Equipping yourself with a device that’s too big for your size can be a real problem. The biggest risk, of course, is not fulfilling the conditions required for authorization within the allotted time. FINMA has advised asset managers to submit their dossiers to the supervisory body by June 30, 2022. This is a very important deadline.
What major difficulties do asset managers face in the process of becoming tax-registered?
The main challenge for asset managers is to translate all the rules that now apply to them into simple processes adapted to their size. It is important to bear in mind that registration is only a first step, and that asset managers must comply at all times with the new directives and procedures.
Nor should managers underestimate the workload and time required to prepare their affiliation.
Finally, we have noticed that some asset managers, focused on preparing their reporting process, have overlooked certain obligations linked to the LSFin as the transition deadlines expire on December 31, 2021. Even if a manager is only in the preliminary stages of affiliation, he or she will need to be LSFin-compliant by January 1, 2022. At that time, he will have to meet certain obligations, such as the duty to provide information or classify customers.
Do you receive files from newly-created managers, a sign of their attraction to the profession?
We have indeed accompanied a few newly-created managers in this process, but it remains too marginal to draw any conclusions. On the other hand, some managers who were thinking of becoming collective investment managers are taking advantage of the obligation to report to the authorities to take the plunge.
